To dig out of the foreclosure crisis and revitalize neighborhoods, Minneapolis is tapping the power of partnerships. With the help of private firms, nonprofits and government, the city has leveraged $76.9 million to shore up its housing stock. The city's comprehensive, three-part foreclosure recovery plan is showing signs of success and is providing a model for other communities reeling from home losses.

An initial goal is to help financially struggling mortgage holders stay put. During the past two years, the city has expanded outreach and counseling, which it says has kept more than 400 families and individuals in their homes. The numbers speak volumes: It costs about $500 to keep owners in their homes, while foreclosures can create as much as $75,000 in lender and city costs.

Although prevention is crucial, Mayor R.T. Rybak, Council President Barb Johnson and other city officials recognized early on that swift action was also necessary to deal with the thousands of properties already lost. According to city data, nearly 5,400 properties went through foreclosure since early 2007. Owners lost homes all over Minneapolis, but the heaviest concentrations were on the North Side and some central and South Side lower-income areas. Some individual blocks had more boarded up homes than occupied properties. Some of those homes were available at fire-sale foreclosure prices. Yet the same housing deals that can benefit good buyers can also attract irresponsible speculators and landlords. So the second part of the city strategy wisely involves reinvesting by acquiring property, developing it and reselling it to owners who want to help build the community. The city has agreements with major lenders to have first crack at homes following foreclosure.

Fraud is another target for the city. And after some North Side neighbors alerted city officials to the situation, the city successfully sued a predatory lender for fraud. In that case, the court ordered that 141 properties be turned over to the city for redevelopment. In fact, tracking North Side property losses revealed that 60 percent of foreclosures in 2007-08 were fraud-related.

Another step for the city is repositioning and repopulating communities. To that end, Minneapolis offered 50 no-interest, $10,000 loans to use on downpayments or home improvements. Nearly 500 applied, indicating strong interest in helping rebuild struggling neighborhoods. Loan recipients agreed to live in the houses for several years, get homeownership counseling and buy on a block with at least one vacant house. About two-thirds of the purchased properties were previously rented; now they are have homestead status. More than half of the buyers paid $100,000 or less, and a majority were younger, first-time homeowners.

In addition to those efforts, the city is focused on public safety, inspection sweeps and helping develop and expand neighborhood amenities to attract and keep good residents.

REBUILDING

"We've got several clusters of redevelopment going on in north Minneapolis. Old and new neighbors work together and know they're not in it alone. That helps give hope and clear blight.''

Minneapolis Mayor R.T. Rybak

Many other Minnesota cities, suburbs and rural areas are also feeling the impact of foreclosure. Increasingly the Twin Cities suburbs are seeing pockets of vacant homes or abandoned housing developments. The Minneapolis model might provide some solutions.

With the help of more than a dozen organizations -- including the General Mills and Home Depot foundations, Franklin National Bank and several state Minnesota housing programs -- Minneapolis has forged some strong and important partnerships. The foreclosure problem remains a challenge for Minneapolis, but the city is better-positioned than most to minimize the damage.